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Throw Out the Lifeline? Republicans Question Program's Value

Throw out the Lifeline? Money is drifting away. That was the
tune from a chorus of House Republicans Thursday as they challenged the FCC's
Lifeline Universal Service Fund subsidy for phone, and if many Democrats have
their way, broadband, service to low-income homes.

In his opening statement for a House Energy and Commerce
Committee Communications Subcommittee oversight hearing on the program,
Chairman Greg Walden (R-Ore.) said the FCC had spent $2.2 billion of
"other people's money" on the program in 2012. He also pushed for a
Lifeline budget, which the FCC said it planned to have in early 2013. Julie
Veech, chief of the Wireline Competition Bureau, said the FCC was still
evaluating its reforms and could not give a time frame. That did not please

Walden pointed out that the fund has increased by more than
250% since 2008, "all while the cost of phone service has gone down."
He also pointed to reports that, although the subsidy is supposed to be limited
to one subsidized phone, some people have eight or more.

Walden also questioned whether the money was even helping
low-income families, with the $7 billion spending over the past five years only
resulting in a 2% bump in phone penetration.

Walden gave the FCC credit for its efforts to reform the
program, launched last year, which it says will save $2 billion, but still
asked whether it should be axed, as some Senate Republicans have also proposed.

Rep. Marsha Blackburn (R-Tenn.) was even more pointed in her
criticism. She said that if the program were up for sunset today, "many in
Congress would vote to take it down due to mismanagement."

She even worked in the Boston Marathon bombing. Pointing out
that the bombers had reportedly been on welfare at one time, she asked whether
maybe the bombers had been on the Lifeline program. The program subsidizes
wireless service to low income homes, and there was also speculation the
bombers could have used a cell phone to set off the bombs.

Ranking subcommittee member Anna Eshoo (D-Calif.) said the
FCC must continue to fix problems, and commended fellow Democrats for their Lifelinereform legislation introduced this week. But she also pointed out the
program was started under iconic Republican President Ronald Reagan and that
continues to advance the important public policy goal of making sure low-income
homes have access to phone service.

Rep. Henry Waxman (D-Calif.), ranking member of the parent
Energy and Commerce Committee, called it an important program and national commitment.
He said he had heard from homeless vets, the disabled and others who said the
program had a big impact in keeping them connected.

Waxman joined with Eshoo and others to make the point that
the Lifeline program was created under Reagan, and expanded to wireless under
President George W. Bush. He said that while he agreed the FCC needs to oversee
the Lifeline program, but should stop there. He said he was not opposed to
Lifeline oversight, but was opposed to it becoming a political issue. He
pointed out that the Universal Service High cost fund pays hundreds per line to
phone companies, compared to the $9.25 per month Lifeline subsidy, and that multiple
lines to a single household can be subsidized, versus only one that is supposed
to be subsidized per household under the Lifeline program.

He also put in a plug for the Matsui bill, which would allow
for the Lifeline subsidy to be used for broadband as well as phone.

Committee Dems pointed out that the Lifeline
program does not affect the budget or deficit, and tried to put to rest were
what it said were those and other myths, including that the Obama
Administration was handing out iPhones and potential tablets via the program.
Eshoo pointed out the subsidy was not for devices, but for the phone service.